Chapel Hill loses bid for affordable housing project

The town’s bid for state and federal money to build about 150 affordable apartments was rejected Tuesday on the eve of a national mayors event in Chapel Hill showcasing local policies and projects.

The Mayor’s Innovation Project, a brainstorming session for mayors and other government officials, started Wednesday evening with a tour of the TOPO Distillery on West Franklin Street. It continues through Friday with invitation-only work sessions on affordable housing, economic development and other issues.

Chapel Hill and Raleigh-based DHIC Inc., a nonprofit housing agency, have collaborated since last year on an affordable housing plan for 8.5 acres of town-owned land in the Ephesus-Fordham redevelopment district, east of downtown. DHIC applied to the N.C. Housing Finance Agency for a grant in May, and a bus tour of the district is part of the mayors conference events.

The state agency told DHIC last week, however, that it had rejected Chapel Hill’s application because it did not include a letter verifying DHIC’s financial commitment to the project. DHIC plans to submit a new application in January for next year’s funding.

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“This is an unfortunate setback, but it is not unusual to take two or three years for such projects to move forward,” DHIC President Gregg Warren said Wednesday. “It would not be the first development that was unsuccessful the first time it was submitted for funding.”

This year’s $423 million in federal tax credits and tax-exempt bond financing will help 37 counties, the N.C. Housing Finance Agency said Tuesday in a news release. The money could build 3,683 apartments, create 8,540 jobs and generate over $13.4 million in local tax revenues, the release said.

Durham will receive $631,210 to renovate 79 apartments to serve older adults. Wake County will get roughly $2.2 million in tax credits, a $500,000 Rental Production Program loan and $859,025 in tax-exempt bond financing to build 442 new apartments for older adults and families.

Chapel Hill officials responded to the news Wednesday in a news release.

“Affordable housing is a critical need for our town, and this setback does not change our commitment to an exciting opportunity to provide housing for seniors and low-income families in the Ephesus Fordham district,” Mayor Mark Kleinschmidt said in a statement. “We have to keep working at it.”

The Legion Road project would be the first public-private partnership since the town adopted its Affordable Rental Housing Strategy this year. The project would include two rental communities – Greenfield Place, with 84 apartments for working families, and Greenfield Commons, with about 60 apartments for older adults. The approved site, beside Chapel Hill Memorial Cemetery, is valued at $2 million to $4 million but could be sold to DHIC for $100.

Key town priority

Warren was a member of the Mayor’s Committee on Affordable Rental Housing that drafted the town’s housing strategy. The committee identified public-private housing projects, such as the DHIC project, as a key priority for the town. The committee was led by council members Donna Bell and Sally Greene, who made bringing the DHIC project to fruition a talking point in her 2012 campaign.

Bell did not return a call seeking comment. Greene responded to an email with a copy of the town’s news release.

The project and the land deal were contingent on the agency receiving state grant money and key to meeting the Ephesus-Fordham district’s goal of 30 percent affordable housing units, or roughly 450 out of 1,495 expected apartments. The project’s promises also helped to solidify support in May for rezoning most of the district and adding a form-based code to determine the size, shape and function of its future development projects.

The council voted 8-1 to use the form-based code and 6-3 to rezone most of the 180-acre Ephesus-Fordham district. Council members Matt Czajkowski, Ed Harrison and Jim Ward cast the dissenting votes.

The new code took effect July 1. The council did not include several properties on Elliott Road that could be rezoned at a later date to include incentives for meeting affordable housing, green building and other community goals.

Developers are expected to submit the first proposals next month for redeveloping property in the district.